I’ve had many long-term real estate investors over the years tell me they’re not worried about the 2020 real estate market because it’s a presidential election year.
I wondered whether their confidence was unfounded.
According to data from Meyers Research, typically sales of consumer goods make it through an election cycle unscathed. It turns out that real estate, however, is the victim of “wait and see”.
Research suggests the closer we get to the election, the more fearful buyers become. As in so many things in life, they fear change. When we act out of fear, our decisions often are made on our emotions, not facts.
In other words, buyers may want to wait until the dust settles after an election before making a big decision.
As we get into summer and fall of an election year, this is reflected in slowing sales and smaller rates of appreciation as we get into summer and fall.
In fact, over the last 13 election cycles, the median change in sales activity from October to November drops 15%.
The good news is they typically rebound in December and the first part of the following year.
If you’re thinking of selling in 2020, you may want to keep this in mind and list your duplex, triplex or fourplex sooner rather than later.
Regardless of your party affiliation, this cycle seems certain to be an especially volatile and emotional election season.